Its a whopper of a jump. Six rupees doesnt quite get you a soft drink anymore but as a price differential of a commodity that drives the prices of other products itself, the jump is going to rankle the budgets of households across the country. Ogra is a far more hated body than the PCB and there is a lurking suspicion that something somewhere is wrong. But, as opposed to the cricketing body, no one can quite put a finger on what is wrong. The tea-stall legions will talk of the infamous Ten Percent and drawing room chatter of the elite will not be vastly different.
The truth is the government is in a bit of a pickle. Oil prices are increasing the world over; the age of cheap energy is over. In fact, there are certain schools of thought that are amazed by the fact that the global economy still hasnt had a proper, 73-style oil shock just yet. But, on the other hand, taxation on petroleum products also happens to be a significant source of revenue for the government, one, which in our limited fiscal space, we cant just stop taking. During the previous military regime, suspicions were voiced that the large price hikes we saw then were prompted not by fluctuations in the international market but by the desire to finance the fiscal deficit.
That doesnt seem to be the case here. Though nothing could be beyond the limited competence of the incumbents. This prompts, in the public sphere, another line of reasoning: if the government hikes prices after international hikes, then it should slash prices in the same proportion. What proportion? The standard unit in which oil prices are measured is price per barrel of crude. It would be foolish to assume that the link is directly related to the price one pumps in at the station. At best, the latter is a function of the special OPEC rate at which we have purchased the oil several months ago. Unavoidable as the hike might have been, there are no two views about the miseries it will cause the public, in particular the urban poor. Tough times.
